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Apple (AAPL) recently made heads turn (again!) with the launch of its new iPhone, Watch and AirPods models, featuring the debut of Apple Intelligence - the company's new artificial intelligence (AI) platform. Amid concerns among some analysts that Apple had fallen behind in the AI race, the Cupertino-based consumer electronics giant has made AI front and center of its new set of products.
However, with all the attention focused around the slow-roll timing of its AI initiatives, Apple's moves in the realm of health tech haven't grabbed nearly as many eyeballs.
Apple's FDA Approvals
As Apple revealed its new iPhone 16 models along with the new Apple Watch and the latest generation of AirPods, its continued focus on health tech, also known as MedTech, was noteworthy. The Apple Watch Series 10 will come laden with advanced health monitoring features, including sleep apnea detection and heart rate monitoring. The device is also thinner by 10% for better wearability, and has received approval from the FDA for over-the-counter (OTC) sleep apnea usage.
Meanwhile, the AirPods Pro 2 introduces hearing aid functionalities, which have already impacted the hearing aid market by offering a more affordable, over-the-counter solution for users with mild to moderate hearing loss. This marks the first ever OTC hearing aid software approved by the FDA.
With both devices and their highlighted features getting approval from the FDA, Apple's MedTech aspirations have received a high-profile shot in the arm, as the company looks set to disrupt the burgeoning market.
However, Apple has been slowly increasing its focus on the healthcare segment for a long time.
Apple's MedTech Bet
Apple's strategy in the MedTech space is underpinned by cutting-edge technology, strategic partnerships with healthcare firms, and a strong focus on privacy. With advancements in AI and health wearables, the company is positioning itself as a key player, leveraging its vast ecosystem of over 1 billion active iPhones and 100 million Apple Watch users globally.
The Apple Health app allows users to manage over 150 types of health data, offering a crucial connection between patients and healthcare providers. This approach provides real-time feedback on health, enabling users to adjust their habits accordingly. At the same time, healthcare professionals gain access to critical health data that can influence treatment decisions.
Apple says it remains committed to privacy, a key part of its healthcare services. Data stored in the Health app is encrypted, and sharing is entirely dependent on user permission. Through its HealthKit API, third-party apps can offer health and fitness insights while upholding the company’s privacy standards.
Apple’s role in medical research has grown through its ResearchKit framework. This platform streamlines participant enrollment, informed consent, and data collection, simplifying the research process. Collaborations with institutions like Harvard and Stanford enable Apple to participate in studies on women's health and cardiac care, and the company is exploring the potential of virtual reality and augmented reality in healthcare applications.
The tech giant has also partnered with consumer wellness programs, integrating the Apple Watch into initiatives that encourage healthier lifestyles. Companies like Paceline, Vitality Active Rewards, and LumiHealth have successfully used the device to promote physical activity across 17 countries, engaging over a million users.
What's the Analyst Opinion on AAPL?
In 2024 so far, AAPL stock has gained about 18%, not too far behind the broader S&P 500 Index ($SPX) and its return of more than 19%. AAPL also offers a dividend yield of 0.45%.
Overall, analysts have deemed Apple stock a “Moderate Buy,” with a mean target price of $247.08. This denotes an upside potential of about 8.3% from current levels. Out of 31 analysts covering the stock, 18 have a “Strong Buy” rating, 4 have a “Moderate Buy” rating, 8 have a “Hold” rating and 1 has a “Strong Sell” rating.
